What you can do about your superannuation?

Congratulations— you’re having a baby. Which means there’s no better time to think about your superannuation. Wait, what? Superannuation isn’t the first consideration for most women when we start families. In fact, many Australians don’t think about superannuation at all. A recent survey on superannuation attitudes found that nearly half of working people find super complicated, while 45 per cent of women ‘don’t feel that their super is their money’ and 52 per cent are too busy focusing on day-to-day finances.

The fact is, women have a greater need to think about super, particularly before or during any break from the workforce. On average, women retire with half as much in savings as men while one in three women retire with no super at all.

According to the Australian Bureau of Statistics, women retire with an average $83,000 in super compared with $135,000 for men. Both figures fall a long way short of the $545,000 recommended for a comfortable retirement, but women have more ground to make up—and we live longer too.

Why do women have less super?The gender pay gap and our greater role as carers come together with stark financial consequences. Figures from the ABS and Workplace Gender Equality Agency show:

Seven out of 10 primary carers are women;

Women make up 75 per cent of all part-time workers, while two thirds of the full-time workforce are men;

The national gender pay gap currently sits at 3 per cent for full-time employees – a difference of $251.20 per week.

Many women don’t make super contributions for years after having a baby, which means we miss out on the compound growth so critical to building a healthy retirement balance.

Okay, so that’s the figures out of the way. Now to the important part —what you can do. First up are some simple measures to protect the super you already have. Second is considering how to build super efficiently, making every dollar count.

Protecting your current super

Review your fees. Knowledge is power—so empower yourself! If you’re paying more than 1 per cent in fees, you should consider switching funds: low fees are critical to compound growth, and what seems like a small difference now can make a big difference to your retirement balance. ASIC offers excellent information on how to choose and compare funds.

Consolidate. If you have super in more than one account, roll over to the fund with the lowest fees and best performance. While you’re at it, search for any lost super too.

Building your future superThere are lots of ways to contribute to super so you may want to seek financial advice on the best strategies for your situation—check out the Barefoot Investor’s principles for getting financial advice that won’t cost you a fortune here. In the meantime, some options to consider include:

Make voluntary contributions. There can be significant tax benefits to contributing more to your superannuation. Consider before-tax contributions such as salary sacrifice, as well as after-tax contributions—visit the ATO’s website as a starting point.

Plan ahead if possible. You might be able to make extra contributions leading up to a career break or, if you have a partner, they can make contributions for you. Employers can have different conditions around paying super while you are on maternity leave, so check in with them before or during your leave.

Action now equals more money laterThere are never enough hours in the day as mothers, and at times getting through each day can feel like a win. But prioritising your finances around critical milestones has the power to change our lives—so don’t wait.

ABS: Women retire with an average $83,000 in super compared with $135,000 for men. Both figures fall a long way short of the $545,000 recommended for a comfortable retirement, but women have more ground to make up – and we live longer, too.

Circle In was established to improve the lives of working parents. We are building a global community for the modern working parent- from considering, to pregnancy, to parenthood, and back to work again. We also partner with leading companies to deliver a unique parental leave support program.